Euro zone inflation slowed in August, pointing to steady interest rates well into 2011. But unemployment remains high and uneven across the region, underlining the two-speed recovery.
The European Union statistics office Eurostat reported that inflation in the 16-nation currency area fell to 1.6 percent year-on-year in August. Officials said inflation won't be an issue for a period of one to two years, and that it's also likely to be curbed by fiscal tightening. But some economists said the easing was most likely a result of cheaper energy and lower core inflation.
At the same time the unemployment rate in the euro zone remained unchanged at 10 percent for the fifth month. Germany's rate has been on the decline, but the opposite trend can be seen in other countries like Spain and Ireland.